Senators push for changes in the development of the Common Securitization Platform to help facilitate greater competition in the secondary mortgage market
WASHINGTON, D.C. – March 18, 2015 – (RealEstateRama) — In a letter today to Federal Housing Finance Agency (FHFA) director Mel Watt, U.S. Sen. Mark Warner (D-VA), U.S. Sen. Bob Corker (R-TN) and a bipartisan group of Senate Banking Committee members raised concerns about the development of the Common Securitization Platform (CSP) and urged the agency to move beyond “the duopolistic tendencies of the past” and adopt changes to ensure the CSP is accessible to not only government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, but also private sector participants.
“As Congress looks to address broad housing finance reform legislation this Congress, the Federal Housing Finance Agency (FHFA) should capitalize on the broad support for an open architecture platform, moving past the duopolistic tendencies of the past,” wrote the senators to Watt. “While we appreciate the need to consider current circumstances, we are concerned that steps already taken are setting up for the CSP to act as an appendage of the GSEs, rather than a truly unbiased and open market utility available for multiple issuers.”
The senators noted that an open platform would “enhance the ability for small and mid-sized lenders to access the secondary mortgage market and help facilitate greater competition in the market going forward.”
Specifically, the senators asked FHFA to reassess the makeup of the Common Securitization Solutions (CSS) board of managers, which is currently comprised solely of Fannie Mae and Freddie Mac employees; establish an advisory committee of outside market participants; and provide Congress with a transition plan from its current ownership structure into one with an open architecture, including a timeline and budget estimates.
“It has been over three years since the idea of the CSP was first proposed,” the senators continued. “If the CSP is going to be a part of the critical infrastructure on which we rebuild the country’s secondary mortgage market, greater progress has to be made in the short-term. As FHFA’s OIG has recommended, we believe that the development of cost estimates for the CSP is a necessary component of successful project management, and should be prudently considered.”
In addition to Warner and Corker, the letter was signed by Sens. Mike Crapo (R-ID), Jon Tester (D-MT), Dean Heller (R-NV), Heidi Heitkamp (D-ND), Pat Toomey (R-PA) and Mark Kirk (R-IL).